On July 2, 2009, HUD issued Change 3 to HUD Handbook 4350.3. The new handbook is effective on August 1. Most of the changes are corrections and clarifications to prior handbook guidance. However, there were several substantive changes including a modification to the 15-month rule; a requirement to include the non-employment income of foster children and all income of foster adults on the 50059; a change in the definition of PRAC Operating Rent; and a relaxation of the rule requiring signatures prior to transmittal of gross rent change certifications that change the TTP or utility reimbursement—you now have 60 days to obtain those signatures and can transmit the gross rent change certification in the meantime.
The 15-month rule change requires you to terminate any household whose annual recertification is not complete at the time you bill for the 16th month after the current AR’s effective date. Prior guidance was to simply stop billing. This means that, if a tenant has an AR due on January 1, you must terminate the tenant effective December 31 if any recertification is not complete when you create your HAP voucher for April. The termination will result in an adjustment returning the subsidy billed for January through March. This requirement is independent of the reason for the delay. If there are extenuating circumstances, an AR effective January 1 can be submitted when the certification is complete. If there are no extenuating circumstances, the tenant must re-qualify with an initial certification effective no earlier than the first of the month after the AR recertification date.
For foster children, the rules are the same as for a dependent child less than 18 years of age: all types of income except employment income is included in household income. For foster adults, all income is included in the household's income.
Since Property Manager already auto-signs gross rent change certifications, you are all set with that change.
Prior to Change 3, the official definition of Operating Rent for Section 202 and 811 PRACs was: ”The total of the contract rent plus the utility allowance. If there is no utility allowance, contract rent equals operating rent. It is the total monthly cost of housing an eligible family. ”Under this definition, Operating Rent is the same as Gross Rent for Section 8.
The new definition is:
”The rent approved by HUD to cover the operating expenses at a PRAC project.” The new definition makes Operating Rent equivalent to Contract Rent for Section 8.
Bostonpost’s understanding is that the reason for the modification was to exclude the utility allowance in the calculation of a vacancy special claim on the 52671-C (Special Claims for Regular Vacancies) form in Field 7 (Contract rent/operating rent at move-out). This has the effect of reducing the amount of a special claim, compared to the past, when there is a utility allowance involved. Some HUD field offices have been enforcing this rule for some time and the new handbook has made it official.
To keep you in compliance, this change has been implemented in Property Manager. If you do not have a utility allowance in your PRAC contracts, there is no impact on you.
Unfortunately, HUD did not make other handbook changes that should occur given the new definition. We have asked HUD for clarification before making other software changes.
We will keep you posted as we hear more about the Change 3 requirements.